Fuel inefficiency

Summary

Marketplace: Fuel Inefficiency Host: Kai Ryssdal
Release Date: January 14, 2025

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Introduction

In this episode of Marketplace, host Kai Ryssdal delves into the multifaceted issue of fuel inefficiency, exploring its economic, environmental, and societal impacts. The episode navigates through topics such as wildfire management technologies, the financial strain on homeowners due to rising insurance premiums, the overwhelming concentration of wealth in major tech stocks, the evolution and politicization of Corporate Average Fuel Economy (CAFE) standards, and innovative solutions to housing affordability in high-cost areas.

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1. Wildfire Management and Technological Innovations

Discussion with Kate Dargan Marquis, Senior Wildfire Advisor at the Gordon and Betty Moore Foundation

The episode opens amidst the ongoing wildfire crisis in Los Angeles, highlighting the severe impact with over two dozen fatalities, 12,000 structures destroyed, and tens of thousands displaced. Kai Ryssdal interviews Kate Dargan Marquis, who provides insights into the current and future technological advancements in firefighting.

• Predictive Technologies: Marquis discusses the deployment of intelligent cameras mounted on mountaintops that utilize image assessment and remote sensing to detect smoke and assess fire severity early on. “We do an image assessment, a remote sensing assessment. The computer system algorithms can define how bad the fire is...” (02:43)

• Firesat Project: She introduces "Firesat," a low Earth orbit satellite system comprising 52 satellites orbiting the globe every 15 minutes. This system aims to detect fires down to a few meters in size, a capability unavailable to firefighters today. “It will give us fire detection down to just a few meters in size.” (02:43)

• Infrastructure and Funding Challenges: Marquis highlights the necessity of government investment to scale these technologies and the reliance on philanthropic efforts to bridge the initial funding gaps. “We have to engage communities and citizens and the local politicians and the homeowners themselves to take the actions necessary.” (05:14)

• Speed of Technological Adoption: Addressing the urgency posed by climate change, Marquis emphasizes the need for rapid implementation of these technologies while acknowledging that they are not standalone solutions. “We're a good 20 years behind the curve. So the answer is we should be moving rapidly, as rapidly as we can.” (05:24)

2. Financial Implications of Rising Insurance Premiums

Report by Justin Ho

The discussion transitions to the financial burdens faced by homeowners due to escalating insurance premiums following natural disasters like wildfires.

• Impact on Borrowers: Justin Ho reports on how increased premiums strain borrowers, sometimes leading to difficulties in affording monthly payments or even losing access to insurance. “The borrower simply may not have the ability to pay for those insurance premiums or in some cases may not have easy access to insurance at all.” (07:51)

• Lender Responses: Lenders are adapting by modifying mortgage terms to help borrowers manage higher insurance costs. Jeanne Height from Fannie Mae explains the flexibility in extending payoff periods or lowering interest rates. “Lenders can modify loans to extend payoff periods or lower interest rates.” (08:21)

• Potential for Foreclosure: In extreme cases where borrowers cannot afford insurance, lenders might force the sale of properties to mitigate risks. “The lender just about doesn't have a choice… the lender has to ask the borrower to pay the loan off.” (09:21)

3. Market Concentration of Tech Giants: The Magnificent Seven

Analysis by Matt Levin

The episode shifts focus to the stock market, particularly the dominance of seven major tech companies, referred to as the "Magnificent Seven" (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla).

• Unprecedented Concentration: Matt Levin explains that these companies now account for over one-third of the S&P 500's value, a concentration level not seen before. “This level of stock market concentration is basically unprecedented.” (11:03)

• Risks of Over-Concentration: Michael Hartnett from Bank of America warns that a downturn in any of these tech giants, especially if their AI ventures falter, could trigger significant market declines affecting both Wall Street and the broader economy. “If maybe some of these multibillion dollar AI bets don't pan out the way these companies think, it won't just tank tech stocks if suddenly they trip up.” (11:15)

• Investor Sentiment and Technological Timing: Rob Arnott from Research Affiliates points out that while investment in AI is substantial, the actual technological revolution may progress slower than anticipated. “The Internet did not take over the world overnight. Maybe the robots won't either.” (12:13)

4. Corporate Average Fuel Economy (CAFE) Standards

Segment by Henry Epp, Reporter at Marketplace

The conversation returns to fuel efficiency standards, tracing the history and political tug-of-war over CAFE standards.

• Historical Context: Originating in the 1970s post the OPEC oil crisis, CAFE standards aimed to reduce dependence on foreign oil by improving vehicle fuel economy. Rebecca Chaz from Purdue University notes that average fuel efficiency has more than doubled since their inception. “In 2023, average fuel economy across all vehicles was 27 miles per gallon, more than double what it was in 1975.” (17:54)

• Unintended Consequences: Kenneth Gillingham from Yale highlights how the averaging aspect of CAFE standards allows manufacturers to offset gas-guzzling vehicles with more efficient models, inadvertently encouraging the production of larger, less efficient vehicles. “Carmakers have been able to sell even more gas guzzlers due to a change to the standards made in the early '80s.” (18:24)

• Political Volatility: The standards have been subject to frequent changes with shifts in presidential administrations, creating uncertainty for automakers. Chris Douglas from the University of Michigan criticizes this inconsistency, which hampers long-term planning. “That makes it difficult for automakers to plan for the long term because every four years the administration changes.” (20:12)

5. Affordable Housing Solutions: Modular Homes in Jackson, Wyoming

Report by Hannah Merzbach

Addressing the housing affordability crisis, especially in high-demand areas like Jackson, Wyoming, Marketplace explores the innovative use of modular homes.

• Modular Construction Benefits: Modular homes are built in factories and assembled on-site, offering cost savings and increased efficiency. Lauren Wooden, Chief Engineer at Wyoming Game and Fish, explains that factory construction bypasses weather-related delays and labor shortages. “Factory construction speeds up the schedule.” (22:51)

• Economic and Quality Advantages: These homes often feature higher quality finishes compared to traditional mobile homes and can be more affordable for both the builder and the occupant. “Modular construction makes up less than 7% of new commercial and residential buildings in North America, but that number has steadily been growing.” (23:43)

• Community Impact: Clark and Danielle Johnson’s move into a modular home underscores the personal benefits, offering them a more spacious and affordable living solution in an area where rental costs are exorbitant. “If I hadn't have seen them come in on pieces, I wouldn't really think the theramodulars.” (24:52)

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Conclusion

Kai Ryssdal wraps up the episode by reflecting on the broader human and community aspects behind economic and environmental challenges. He emphasizes the crucial role of first responders and community workers in mitigating disasters and supporting recovery efforts, highlighting their often-overlooked contributions to societal resilience.

• “...no small part of this story is about the people doing the work to take care of the rest of us.” (26:06)

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Notable Quotes:

• Kate Dargan Marquis:
  “We should be moving rapidly, as rapidly as we can.” (05:24)
  “We're a good 20 years behind the curve.” (05:24)

• Justin Ho:
  “Borrowers can also take their time to just focus on recovering and figure out their payments later.” (08:59)
  “That's because the lender doesn't want to be on the hook if an uninsured home floods or burns down.” (09:21)

• Matt Levin:
  “This level of stock market concentration is basically unprecedented.” (11:03)
  “Maybe the robots won't either.” (12:13)

• Rebecca Chaz:
  “In 2023, average fuel economy across all vehicles was 27 miles per gallon, more than double what it was in 1975.” (17:54)

• Kenneth Gillingham:
  “Carmakers have been able to sell even more gas guzzlers due to a change to the standards made in the early '80s.” (18:24)

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Final Thoughts

This episode of Marketplace intricately weaves together the threads of fuel inefficiency, technological advancements, economic pressures, and innovative solutions, providing listeners with a comprehensive understanding of the challenges and opportunities in addressing fuel inefficiency and its broader implications.

Transcript

[Julie]

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[Kate Dargan Marquis]

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[Kai Rysdal]

On the program today, the magnificent seven, the stocks not the movie housing two and the fires From American Public Media, this is Marketplace in Los Angeles. I'm Kyle rysdal. Monday today, 13th January. Good as always to have you along everybody. We are still on fire watch here in Los Angeles. Red flag warning is the technical term as the two biggest fires, Palisades and Eaton, sit at various degrees of containment with more wind on the way. More than two dozen dead so far, 12,000 structures destroyed, tens of thousands of people displaced. As you have been seeing monumental effort for some 14,000 firefighters using all the tools at their disposal. Technology is and will be in the future. Among those tools, Kate Dargan Marquis is senior Wildfire Advisor at the Gordon and Betty Moore Foundation. Kate, thanks for joining us.

[Kate Dargan Marquis]

Thank you, Kai.

[Kai Rysdal]

You know, so we were chatting just before we turned on the microphones and you said you do a lot of work now on the future of fire. And before we get there, I want to talk about the right now of fire and what technology is out there that can help us figure out what's happening on fire. Sort of even before they start.

[Kate Dargan Marquis]

Right? Even before they start. So you were thinking how can we predict the when and where of fire?

[Kai Rysdal]

How can we predict it and see it? And I mean there must be AI powered cameras and all of that.

[Kate Dargan Marquis]

Well, let's start off then with the moment that the fires do start. We have put to work these intelligent cameras that are mounted on mountaintops repeater sites and we see the smoke columns arising from those cameras. We do an image assessment, a remote sensing assessment. The computer system algorithms can define how bad the fire is by the image detections of the changes. And the fire agencies are alerted at the moment the smoke is detected in the first place. We're also working really hard right now to put up a system called firesat. And that is a low earth orbit satellite system that will ultimately launch 52 satellites that circle the globe every 15 minutes. It will give us fire det down to just a few meters in size. And this is something that firefighters don't have today.

[Kai Rysdal]

This is sort of a little sideways, but roll with me here. This is kind of an infrastructure question, right? It's a firefighting infrastructure challenge, the future of fire. And when you start talking infrastructure, you have to talk scale. And a lot of that investment seems to me to have to come from government sources. These private companies, I imagine, are counting on the government to sort of give them a little boost as they try to scale.

[Kate Dargan Marquis]

Yes, but that is a tough sell.

[Kai Rysdal]

Yeah.

[Kate Dargan Marquis]

How you build a market and how you invest in R and D is always a chicken or the egg question. You have to have a market to make the investment pay off. Government is not necessarily the most innovative of purchasers. So figuring out how to mix the innovative individuals in government, how to do what we call co development, where you sit down with a group of firefighters who may not know what technology could and paint the vision for them. And at the moment we're leveraging philanthropy to be able to show the way. So for that's that's why a number of large philanthropic folks, especially in the California area, have been investing in technology related projects underwritten by philanthropic investments for the first several years.

[Kai Rysdal]

That's the scale challenge. It seems to me there is also a speed challenge. And with the acknowledgment that you're a firefighter, not a climate scientist, it's clear that climate change means these fires are going to be coming more often and they're going to be bigger. The speed challenge here is a very real one. No?

[Kate Dargan Marquis]

Well, when by speed you mean how long can we afford to get our hands around this truly devastating, right?

[Kai Rysdal]

How fast can we leverage technology and all the things you and others are working on in an atmosphere where the rate of change is speeding up?

[Kate Dargan Marquis]

Well, we're a good 20 years behind the curve. So the answer is we should be moving rapidly, as rapidly as we can. And I don't want to say that technology is the answer because at the end of the day, there is a very difficult and complex problem to solve relative to keeping communities from burning down the way we just witnessed. And a lot of that has to do with getting communities and individuals to engage at the level of the House. We have to engage communities and citizens and the local politicians and the homeowners themselves to take the actions necessary. Some of that involves technology. But in high wind conditions, in overwhelming fire starts, multiple fires in a small geography under those kinds of weather and fuel and temperature dryness conditions, really at the end of the day we have to have passive protections built in at the house scale of themselves. And that's an important, important piece of the equation.

[Kai Rysdal]

Kay Dargan Marquis has been in firefighting her whole life. Right now she's at, she's at the Gordon and Betty Moore foundation doing the same thing. Kate, thanks very much for your time. I really do appreciate it.

[Kate Dargan Marquis]

Good luck to you, Kai, you too.

[Kai Rysdal]

Thanks. Bye.

[Kate Dargan Marquis]

Bye.

[Kai Rysdal]

Wall street on this Monday. Technology took the hit. Oil was up, bond yields too. We will have the details when we do the numbers. The costs of any natural disaster, wildfire, hurricane, flood, what have you. Those costs are borne at least in part by homeowners themselves, especially if their insurance premiums spike afterward. Last week, the ratings agency Morningstar Dbrs said the fire situation in LA reinforces the need for adequate rate increases on home insurance in California. That's going to be a challenge for residential mortgage holders and for business borrowers too. So Marketplace's Justin Ho called up a few lenders to get a sense of what's what for those would be borrowers.

[Justin Ho]

Over the last year, Dominic Miartin, the CEO of American Pride bank in Macon, Georgia, says many of his clients have faced steep spikes in their insurance premiums after major hurricanes in the Southeast. In those cases, the borrower simply may.

[Kai Rysdal]

Not have the ability to pay for those insurance premiums or in some cases may not have easy access to insurance at all.

[Justin Ho]

Njarten says when borrowers have to pay way more for insurance, it's in the bank's interest to make sure that a borrower can still afford their monthly payments.

[Kai Rysdal]

Because the last thing that a lender, particularly a community lender, wants to do is have to take the property or foreclose on the property. That hurts everyone, hurts the community, hurts the borrower and hurts the bank.

[Justin Ho]

Myrtin says the bank has a few tools it can use to help a borrower. For one, it can make changes to an existing mortgage to help offset the higher cost of insurance. Janice Height with the government backed mortgage corporation Fannie Mae says lenders can modify loans to extend payoff periods or lower interest rates.

[Matt Levin]

It actually, you know, restructures the mortgage to take into consideration what the borrower's payment situation is to make the payment more affordable.

[Justin Ho]

Borrowers can also take their time to just focus on recovering and figure out their payments later, says Nathan Raggi, CEO of First Pacific bank in San Diego, California. He says when wildfires have affected his clients in the past, those borrowers typically defer their payments.

[Matt Levin]

Normally, it's like a 90 day deferral where you'll just hold off on payments.

[Kai Rysdal]

Those will be tacked on to the back of the loan.

[Justin Ho]

If a borrower's insurance premiums rise too high or if a borrower loses their insurance, their lender might force them to sell the property, says Dominic Miartin, an American Pride bank.

[Kai Rysdal]

The lender just about doesn't have a choice, right? The lender has to ask the borrower to pay the loan off.

[Justin Ho]

That's because the lender doesn't want to be on the hook if an uninsured home floods or burns down. I'm Justin Ho for Marketplace.

[Kai Rysdal]

Those of you who've flipped on CNBC sometime in the past couple of years, either on purpose or by accident, you're going to know the phrase the Magnificent Seven. Mag7 in Wall street speak Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. Huge American tech companies of one specialty or all of which are invested heavily in artificial intelligence. But the reason they are so magnificent is because over the past two years, their stock prices have soared to the point where those seven companies now account for more than one third of the value of the entire S&P 500, which I will remind you here, has 500 companies in it. So as earnings season kicks off this week, Marketplace's Matt Levin explains what it means to have so much money concentrated in so few companies, both for Wall street and for the real economy.

[Matt Levin]

This level of stock market concentration is basically unprecedented. I don't think if you go back.

[Kai Rysdal]

In history, you can see a period of time where the top five, the.

[Matt Levin]

Top seven, the top 10 US companies are so dominant. Michael Hartnett is the chief investment strategist at bank of America and the guy who actually coined the term Magnificent Seven. So if maybe some of these multibillion dollar AI bets don't pan out the way these companies think, it won't just tank tech stocks if suddenly they trip up. Yeah, that can quickly cause a big.

[Kai Rysdal]

Decline in the stock market. And in turn, that will have an.

[Matt Levin]

Instant impact on whether individuals get up in the morning or companies get up.

[Kai Rysdal]

In the morning and say we're going.

[Matt Levin]

To spend more money or less money. If that scenario sounds eerily reminiscent of the early 2000s.com bust, there are definite similarities. But unlike, say, pets.com, the Mag 7 are actually making money right now, like ungodly amounts of money. Nelson Yu heads equities at Alliance Bernstein.

[Justin Ho]

These are companies that have very, very healthy balance sheets.

[Matt Levin]

Investors have plowed money into the Mag 7 because they think AI is going to be the next big thing. But Rob Arnott at the investment firm Research Affiliate says even if those investors are right about the tech, they could be wrong on the timing. Technological revolutions generally happen slower than anticipated. Humans, by their very nature, embrace change gradually.

[Kai Rysdal]

They don't like it crammed down their throats.

[Matt Levin]

The Internet did not take over the world overnight. Maybe the robots won't either. I'm Matt Levin for Marketplace.

[Kai Rysdal]

We will not cram anything down your throats. We will however, offer you a podcast. If you miss something on the Air, Marketplace.org is where you can get it. Or of course the platform of your choice. Just follow us. Coming up, temperature controlled environment and guys running around in shorts in the wintertime building stuff. I guess construction just ain't what it used to be, huh? First though, let's do the numbers. Dow Industrials gained 358 points today. That is 9. 10% 42,297. The NASDAQ went the other way, down 73 points about 4, 10% 19,000 to 88. The S&P 500 ticked up 9 points 2 10% 58 and 36 there. Oil prices hit a four month high today on predictions for broader sanctions on Russian oil that could squeeze its supply internationally. Brent crude jumped 1.3%, $80.80 a barrel. U.S. west Texas Intermediate, the American benchmark increased 2.3 quarters of 1%, 2.3 quarters of 1%. What is that? How about 2 1/4% today? KAI 78.66 a barrel. Tech stocks as I mentioned took a tumble. Nvidia sank 2%. Meta dipped 1 and 2 10% today. The dollar rose yet again following Friday's strong jobs report. The index, which measures the dollar against a basket of different currencies added about a quarter percent today at its peak. Bond prices down the Yield on the 10 year t note increase of 4.7 niner percent. You are listening to Marketplace.

[Matt Levin]

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[Julie]

Hi, this is Julie from Centennial, Colorado. I listen to Marketplace on my drive home from all my 3 to midnight ER shifts. Kai and the gang keep me awake and interested for my 30 minute drive. For someone not in the financial field, it's a fantastic synopsis of all things business and economics. I love the commitment to showcasing a steady stream of brilliant and articulate women who are experts in their field. Join me in supporting Marketplace with a gift today. Go to marketplace.org donate.

[Kai Rysdal]

This is Marketplace. I'm Kai Rysdal. The Marketplace acronym of the day today is cafe. That stands for Corporate Average Fuel Economy cafe, of course. And yes, CAFE is how you say it. Those are federal fuel efficiency requirements for cars and trucks. By model year 2026, for instance, current CAFE standards say the industry is supposed to reach an average of 49 miles per gallon. Between now and model year 2026, though, there is going to be a change in who's in charge of federal regulations and CAFE standards are in the sights of the President elect. It's important to point out here that presidents have tinkered with federal fuel standards for years. But before it happens again, Marketplace's Henry Epp looks at why we have them in the first place and how they have changed the kinds of vehicles we drive.

[Matt Levin]

The story of the CAFE standards starts in the early 70s with the first oil crisis. In 1973, OPEC countries cut off oil to the United States. That caused huge lines at gas stations and a spike in oil prices.

[Julie]

And so the idea was to improve the fuel economy of our cars so that we'd be less susceptible to availability shocks from these markets.

[Matt Levin]

Rebecca Chaz is an assistant professor at Purdue University. Back then, vehicles on average only got about 13 miles to the gallon. So Congress passed what became the CAFE standards to require car companies to improve that metric. They took effect in 1978 and quickly became a political football. More than a decade later, they came up in one of the 1992 presidential debates. Here's then President George H.W. bush.

[Kate Dargan Marquis]

I wondered when Governor Clinton was talking to the autoworkers whether he talked about his and Senator Gore's favoring CAFE standards as a fuel efficiency standards of 40 miles per gallon that would break the.

[Matt Levin]

Auto industry and throw a lot of.

[Kai Rysdal]

People out of work.

[Matt Levin]

Beyond their role as a political talking point, the standards have had an effect. According to the Environmental protection agency In 2023, average fuel economy across all vehicles was 27 miles per gallon, more than double what it was in 1975. Again, Rebecca Chez at Purdue we've seen.

[Julie]

This incredible improvement in the fuel economy of our vehicles. They've gotten safer over time. We've saved a lot of energy and greenhouse gas emissions over the course of that period.

[Matt Levin]

But the standards have had some unintended consequences partly because of that A for average in the CAFE acronym. The standards average the fuel efficiency of all the new vehicles each company sells, says Kenneth Gillingham, a professor at the Yale School of the Environment.

[Kai Rysdal]

Some of them might be above the standard, some of them might be below.

[Matt Levin]

The standard, but they're supposed to average out. A somewhat recent example, Gillingham says, is the plug in hybrid Chevy Volt from gm.

[Kai Rysdal]

Each Chevy Volt that was sold permitted them to sell some number of other gas guzzling larger vehicles.

[Matt Levin]

And carmakers have been able to sell even more gas guzzlers due to a change to the standards made in the early 80s, says David Zipper, a senior fellow at the MIT Mobility Initiative. There was an element of skewed incentives because of what I would call the light truck loophole. That loophole, as he calls it, created one standard for passenger cars think sedans and another less strict, stand light trucks, which include SUVs. And companies started making and selling more of them. Zipper argues those changes helped push drivers into bigger and bigger vehicles over time. Now we have larger vehicles on American roads than we otherwise would have, and that creates some serious problems around safety and around infrastructure. Meanwhile, the standards have shifted under different presidents. Car companies saw them rise under President Barack Obama here announcing the change in 2011. By 2025, the average fuel economy of their vehicles will nearly double to almost 55 miles per gallon. Then in 2017, former and future President Donald Trump said he'd roll them back.

[Kai Rysdal]

We're going to work on the CAFE standards so you can make cars in America again.

[Matt Levin]

And campaigning in 2019, President Joe Biden vowed to bring them back up.

[Kai Rysdal]

I think we should raise the CAFE standards, bring them back to where they were, which would have saved 12 billion gallons of oil to begin with and move beyond.

[Matt Levin]

That's a lot of back and forth, says Chris Douglas at the University of Michigan, Flint.

[Kai Rysdal]

That makes it difficult for automakers to plan for the long term because every four years the administration changes and that.

[Matt Levin]

Changes the mileage standards. Douglas thinks that uncertainty is likely to continue as Trump is coming back to office, but is term limited so the standards could change once again. Four years from now. I'm Henry AP for Marketplace.

[Kai Rysdal]

In some parts of the country, housing has become so expensive that employers are stepping in to help their workers. In Jackson, Wyoming, a state agency has found a way to stretch its limited dollars. They're turning to modular homes built in factories and often bigger and more customizable than mobile homes. And once they're built, kind of like Legos, assembled section by section, they're permanent. Hannah Merzbach from the Mountain west news bureau has our story.

[Julie]

Clark and Danielle Johnson are trying to pack up boxes in the messy living room of their Jackson, wyoming duplex. Their two kids, 2 and 4 years old, run around and get in the way.

[Matt Levin]

Do you have the stool too, or just the chair?

[Julie]

Just that they're packing up kitchen stuff like silverware and spices.

[Matt Levin]

Yeah, all the little random bits and pieces that you don't know which box to throw them in and they'll be lost forever.

[Julie]

Clark is a biologist for Wyoming Game and Fish, and his family is moving into the agency's new modular employee housing. Their rent will be the same, about $2,500 a month. The new place could rent for double that in the Jackson market and is three times as big as this one.

[Matt Levin]

Kind of see everything from where you're standing, but two bedrooms, bathroom, we've got kind of just two little closets and then a little living room and kitchen.

[Julie]

The Johnsons might have left Jackson had subsidized housing not been an option. This 10,000 person mountain town has made headlines for rents that are just as high as New York City's. So some employers are trying to increase affordable housing stock. They pay for construction and then rent to employees at below market rates. They're building modular homes.

[Kai Rysdal]

I mean, it's the same style of construction as stick build. It just happens to be in a shop.

[Julie]

Lauren Wooden is the chief engineer at Wyoming Game and Fish. He says it's hard to build in Jackson in winter weather, but factory construction speeds up the schedule.

[Kai Rysdal]

Temperature controlled environment and guys running around in shorts in the wintertime building stuff instead of being all covered up in car hearts and dealing with snow all the time.

[Julie]

Pre built homes bypass the challenge of trying to find local construction workers. And modulars can cost less. Wyoming Game and Fish saved more than $5 million on seven buildings, according to the architect Greg Mason.

[Kai Rysdal]

Because of bulk construction, the raw materials.

[Matt Levin]

Of lumber and all that stuff, they tend to get a much better deal for all products.

[Julie]

Modular construction makes up less than 7% of new commercial and residential buildings in North America, according to the modular building Institute. But that number has steadily been growing. The tiny home revolution increased interest and the quality has come a long way from your classic 70s double wide manufactured home.

[Kai Rysdal]

And everything comes out now with some.

[Matt Levin]

Really nice marble or stone countertops.

[Julie]

The town of Kemmer, Wyoming is trucking in about 90 units to house workers for a new nuclear plant. And in Colorado and Michigan, state governments are incentivizing new projects with loans and grants for modular home companies. Still, the cost benefit doesn't always pan out for, say, just one single family home. And there are still some stigmas to overcome. When Danielle and Clark Johnson first learned that their new place would be modular, they weren't completely sold.

[Kai Rysdal]

I was like, well, what's it gonna be like?

[Matt Levin]

Gonna look like a trailer house of some sort, which they definitely don't.

[Julie]

But on move in day, Clark Johnson says their new place looks like a typical house.

[Matt Levin]

If I hadn't have seen them come in on pieces, I wouldn't really think the theramodulars.

[Julie]

The kids are exploring all the open floor space. There are three bedrooms, a fenced in backyard, a walk in pantry, even a laundry room.

[Matt Levin]

Way, way, way more space than we have been used to being in for the last eight years.

[Julie]

I think now that all the furniture and boxes are moved in. Next up, getting the kids to settle into bed and digging out the silverware. In Jackson, Wyoming, I'm Hannah Merzbach for Marketplace.

[Kai Rysdal]

This final note on the way out today. It has been, as you know, a rough week or so here in Los Angeles. And if the wind forecasts are right, it could be another rough couple of days. And I want to be clear. My family and I are among the very lucky ones. Friends of ours, my kids, teachers, colleagues of mine here at Marketplace have lost nearly everything. But I had a thought as I was waiting for coffee in the breakfast line at the Hampton Inn on Thursday morning. We try on this program to make people smarter about this economy, to help them understand why it matters. Thing is, there's no straight ahead Marketplace angle to a story like this. No moment where a listener is going to say, ah, now I understand why the trade gap or corporate earnings or the inner musings of Jay Powell mattered to me. We will of course, talk about the economics of wildfires and the recovery to come. But as I waited last Thursday for the hotel staff to refill the coffee machine and without losing sight of the dead or the destruction, it occurred to me that no small part of this story is about the people doing the work to take care of the rest of us. The first responders who've come from all over, all of the staff at all of the evacuation hotels, the small businesses and the restaurants nearby. When we got back into our house this weekend, there was new mail waiting for us in a wildfire evacuation zone. I mean, it was mostly bills, but there was mail. People had been working, taking care of us. Our daily production team who was working last week while I was out, including Danny Corbin, Nicholas guillaume, Maria Hollenhorst, Iru Ekpenobi, Sarah Leeson, Sean McHenry and Sofia Terenzio. I'm Kyle Rysdal. We'll be back tomorrow. This is apm. Hi, this is Michael from Sinking Spring, Pennsylvania. Marketplace is both enjoyable and extremely informative. Kai and the reporters go out to all kinds of people in the community and they ask straight ahead questions like how are you holding up these days? It's very personal and as we listen, we get a good sense of the challenges people face as they are trying to make it from day to day. I listen to the Marketplace podcasts every day and have been doing so for a number of years. It's a breath of fresh air that helps me understand the economic world better. Join me by making a gift to marketplace at marketplace.org/donate.